The town of Fairfield has settled its lawsuit against Time Warner Cable over franchise fees, coming away with cash and a more favorable agreement on how much the cable provider will pay the town in franchise fees.

Time Warner Cable will pay Fairfield a lump sum of $125,000, and over the next two months the cable franchise fees that are paid to the town will increase from 5 percent of limited basic cable TV services to 5 percent of all gross revenue, including things such as pay-per-view channels, going forward, which the town’s attorney, Bill Lee, of Waterville, said the town had sought all along.

“Time Warner is finally going to do what we asked it to do, which was to change the franchise fee rate,” Lee said by phone Tuesday. “If we had gone to full trial, we’d might have gotten more, we might have gotten less; that’s the nature of settlements. You never know for sure.”

Lee said the town agreed to the settlement because a trial would have taken a long time and would have been expensive. Lee added that the town’s primary witness, former Town Manager Paul Blanchette, died before the case could go to trial, leaving many unanswered questions.

Michelle Flewelling, Fairfield’s current town manager, said she and three members of the Town Council attended a judicial settlement hearing June 2 at U.S. District Court in Bangor. The Town Council voted 5-0 on June 8 to accept the settlement, she said.

“The former town manager was involved in all of the research that went into the case,” Flewelling said Tuesday. “I’m happy that this case settled without having to go to trial and with a dollar amount that allowed the town to recover its legal fees and some additional funds that were believed to be owed. I look forward to the negotiations of a new cable franchise agreement.”

Lee said the ruling is a victory for the town of Fairfield.

“The town is pleased with the results of the litigation and looks forward to working with Time Warner’s successor, Charter Communications, to negotiate a new franchise agreement,” he said.

Andrew Russell, director of communications for Charter Communications, said the company would not comment on the settlement.

Time Warner, the largest cable provider in New York and Los Angeles and other markets, was bought in May by Charter Communications Inc., which mostly operates in the Midwest, according to published reports. The Stamford, Connecticut-based company also bought Bright House Networks.

Over the next year and a half, Charter will phase out the Time Warner Cable and Bright House names in favor of its own name, Spectrum.

The lawsuit was brought by the town in October 2014 in Somerset County Superior Court in Skowhegan, but Time Warner later asked that it be moved to U.S. District Court in Bangor.

The town was seeking payments owed as far back as a 2005 franchise agreement that called for annual payments to be made by the service provider — Time Warner — to the town for the right to install its utility poles and transmission lines in the town’s public right of way.

Federal law allows the town to charge up to 5 percent of the annual gross revenue earned by the company for the right to do business in Fairfield.

Former Town Manager Josh Reny said the company had paid annual fees in the $18,000-to-$20,000 range, but that should have been more — perhaps three times more.

The town contended that in 2005 the Town Council voted and the town manager formally requested that the franchise fee be increased to the maximum allowed. The cable company at the time was Adelphia Communications Corp. Time Warner acquired the local system from Adelphia in 2006 and assumed its obligations.

The franchise fee had been 3 percent of basic cable service revenue, not including premium channels such as HBO and Showtime. The town said it notified the cable company in 2005 that it was exercising its right to raise that fee to 5 percent of all gross revenue for the year, including premium cable TV packages and channels, not just basic service.

In a motion for summary judgment filed in August, Fairfield said the company had breached the terms of its contract with the town and asked it to make Time Warner pay it $353,000 in unpaid fees.

Time Warner filed its own summary judgment motion, saying that Fairfield misunderstood the contract language and the company had paid what it owed.

A court may grant summary judgment in cases where the facts are not disputed.

In a recommended decision in the case filed in December, Magistrate Judge John Nivison denied Fairfield’s motion and most of Time Warner’s motion and the case was set for trial. This month’s settlement means the parties will not have to go to trial.

Doug Harlow — 612-2367

[email protected]

Twitter:@Doug_Harlow

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